CIMC Workshop Impact of LNG on the PNG Agriculture Sector 1 April 2011 Palm Oil Model: Agro-Nucleus Enterprise
Oil Palm
Oil Palm - grown by Smallholders Large Plantations
Palm Oil CPO PKO
Palm Oil made here x12 (and 2 more on the way)
x2 Downstream Refining
Development of Oil Palm in PNG: Vanimo Wewak Mt. Hagen Factors that affect growth : Rainfall 1800-5000 mm / year Sunshine Gusap 2005 Ramu oil palm project Lae 1987 New Ireland oil palm project Kavieng min of 2000 h / year Rabaul Temperature 1969 between Bialla oil 22 palm project 32 o C Kimbe Altitude less than 500 m above SL Popondetta 1967 Hoskins oil palm project 1976 Popondetta oil palm project Daru Port Moresby 1920 s observation plantings 1960 s WB study re recommendation Alotau 1985 Milne Bay oil palm project
Nucleus Estate/Smallholder model (NES)
Smallholder Plantation Smallholder Smallholder
Smallholder Crop collection, transport & processing provided by a Milling Company Plantation Mill Smallholder Smallholder
Crop is harvested every 10-14 14 days all year round Smallholder Plantation Mill Smallholder Within 3-days of cutting, crop must be transported to mill Smallholder
Palm oil is transported to the port bulking terminal for export Smallholder Bulk Terminal Plantation Mill Smallholder Smallholder
Smallholder Nucleus Estate (or Major Integrated Producer): Fully vertically integrated companies; Bulk R&D, seed production, Terminal plantations, transport, milling, refining, marketing and commodity trading. Via NES model they provide to smallholders: Seedlings Crop collection & transport FFB purchasing Financial credit (usually interest free) Plantation Pest & disease control operations Extension & support services (direct) Smallholder Voluntary financial Mill support for Government extension service Repair & maintenance of transport infrastructure Support for social infrastructure (education, health & police) Smallholder Future electricity from CDM methane power plants?
Oil palm production & area in PNG Area Estimates Dec 2009 (ha) Project Area Plantation Smallholder Total Hoskins (NBPOL, Mosa Group) 32,228 21,902 54,130 41.6% 82.3% Popondetta (NBPOL, Kula Group) 8,994 14,285 23,279 17.9% Milne Bay (NBPOL, Kula Group) 11,629 1,699 13,328 10.2% New Ireland (NBPOL, Kula Group) 5,689 2,613 8,302 6.4% Ramu (NBPOL, RAIL) 7,668 260 7,928 6.1% Bialla (Hargy Oil Palms) 9,906 13,163 23,069 17.7% TOTAL 76,114 53,922 130,035 58.5% 41.5% FFB Production in 2010 (tonnes) Project Area Plantation Smallholder Total Hoskins 965,911 425,358 1,291,349 51.4% 84.1% Popondetta 228,659 143,043 371,702 14.8% Milne Bay 235,998 12,426 248,424 9.9% New Ireland 105,485 16,638 122,123 4.9% Ramu 81,202 953 82,155 3.3% Bialla 205,871 192,669 398,540 15.9% TOTAL 1,723,206 791,087 2,514,293 68.5% 31.5%
Value of Major Agricultural Exported from PNG - 1976 to 2009 1,200,000 1,100,000 Palm Oil & Derivatives 1,000,000 Coffee Export Value (K'000, fob) 900,000 800,000 700,000 600,000 500,000 400,000 Cocoa Copra Palm Oil Coffee 300,000 200,000 100,000 0 1976 1980 1984 1988 1992 1996 2000 2004 2008 Year
Exported Oil Palm Products in 2009 PGK Tonnes Crude Palm Oil (CPO) 729,791,292 445,227 Palm Kernel (PK) 9,913,584 15,420 Palm Kernel Oil (PKO) 61,873,379 34,425 Palm Kernel Expeller (PKE) 1,951,280 13,654 Refined Bleached Deodorized Palm Oil (RBDPO) 48,273,700 21,321 Olein 23,041,254 14,223 Stearin 24,085,339 11,370 Palm Fatty Acid Distillated (PFAD) 3,722,056 3,366 Waste acid oil 39,907 70 TOTAL VALUE OF EXPORTS 902,691,791
Change in Quantity of Agricultural Commodities Exported from PNG 2007 to 2009 2,000 1,800 1,600 Coffee Cocoa Palm Oil & Derivatives % Chang ge relative to 1976 1,400 1,200 1,000 800 600 Copra Oil Palm 400 200 0-200 1976 1980 1984 1988 1992 1996 2000 2004 2008 Year
National Oil Palm Organisations P.O.P.A. Palm Oil Producers Association O.P.I.C. Oil Palm Industry Corporation O.P.R.A. Oil Palm Research Association
POPA - The Oil Palm Companies New Britain Palm Oil Group: - New Britain Palm Oil Ltd (WNBP) - Ramu Agri-Industries Ltd - Kula Palm Oil: Higaturu Oil Palms, Oro Milne Bay Estates, MBP Poliamba Ltd, NIP Hargy Oil Palm Pty Ltd
Oil Palm Industry Corporation
Oil Palm Industry Corporation Statutory Organisation established by the OPIC Act 1992 to replace DPI/DAL Smallholder Oil Palm Extension Service OPIC s sole responsibility is to provide extension & support services to smallholder oil palm growers Managed at a local level through LPCs Principally financed by FFB levy (smallholders and voluntary matching payment from milling C o s). No Government funding for extension services. All milling companies are also providing parallel extension services to smallholder growers
Oil palm smallholders in PNG: Number of smallholder blocks (Dec '09) Project Area # blocks Hoskins 7,126 Popondetta 5,707 Milne Bay 789 New Ireland 1,405 Ramu 130 Bialla 3,156 Total 18,313 ~200,000 dependent for their livelihoods on oil palm blocks
Types of Smallholders: Land Settlement Scheme (LSS); Alienated land, 99-yr State lease Older project areas only (WNBP & Oro) Settlers from other parts of PNG Serious land pressure issues (already 3rd generation) Village Oil Palm (VOP); Development of own customary land Lower productivity Customary Rights Purchase Blocks (CRPB); Recent trend esp in Hoskins area (ref CLUA)
PNG Oil Palm Research Association
PNG Oil Palm Research Association A not-for-profit research association formed in 1980 Owned by and operated for all oil palm growers Centres in all oil palm production areas Recognised by Government as being part of PNG s National Agricultural Research System (NARS) Financed by FFB levy from plantations & smallholders and external research grants. No Government funding for oil palm R&D.
Palm Oil Sub-sector Apex Body? No apex body currently exists in the palm oil sub-sector. Need for such an entity identified by all stakeholders. Also the need to avoid the governance, performance and accountability issues associated with public sector bodies is recognised. Palm Oil Council is currently in the process of being formed
The Road Ahead
WHAT ARE THE ISSUES THAT WILL AFFECT SUSTAINABLILITY OF OIL PALM DEVELOPMENT IN PNG? THE TOP SPECIFIC ISSUES RAISED BY STAKEHOLDERS... Shortage of skilled labour and experienced management staff Over-population in oil palm development areas Infrastructure development, support & maintenance Land issues accessibility & disputes Pests & disease increasing risk Lack of Government support & services Cash management, rural financial services & high cost of living Poor quality of political & public sector leadership Public opinion and anti-oil palm campaigns Law & order, alcohol & drugs, HIV and other social issues...
Road ahead - focus and commitment to sustainability: All palm oil companies achieved ISO14,001 accreditation PNG a leader in development of RSPO All palm oil companies RSPO certified (or in the process of being) Large investment in sustainability A profound systems change - not an add-on Increased cost of production (~8$ per tonne) large capital investment (refining, fractionation & CDM) A major driver is market access: All PNG s palm oil is destined for Europe Highly sensitive market to issue of sustainability and traceability Other Markets?: Despite being a world leader in business & technical innovation Production costs in PNG very high and timelines long PNG can t compete on price Indonesian, Malaysia & others
Industry Growth in next 10-1515 years? Very little alienated land available for development (not that this is a problem) Expansion via; Smallholders Lease leaseback sub-lease arrangement with customary land owners for plantation development RSPO Criteria 7.3 (primary forest & HCV) Carbon stock threshold to be adopted for land conversion Focus on yield intensification and planting on non-forest land Possibility of new viable and sustainable new projects in PNG? One per decade, max two!
Government and palm oil development? No support for the real palm oil sub-sector Over 15-years of Government facilitation of new palm oil developments which has led to?? DSP2030 & NADP triple palm oil exports by 2030? Expressed strong desire for new investors Appears PNG is being advertised overseas as a large available land bank Departments & politicians courting any entrepreneurial proposal no matter how little expertise, credentials or lack of financial capacity are exhibited BUT: No consultation with the country s palm oil sector No understanding of palm oil development and its requirements in PNG
MAJOR RISKS The virtual palm oil industry!! Emergence of many oil palm agro-forestry projects All with a focus on securing FCAs! Land grab using SABLs Over 5.3 million ha LLB to third parties (i.e. land alienation, usually for 99-yrs) Most profess to be for palm oil development!! This poses a massive reputational risk for the country and its palm oil exports; this will directly affect our market access; and Is blocking real development opportunities from real investors The real palm oil industry must take (and is taking) an active role is supporting awareness, opposition and mitigation activities to prevent these abuses of customary land & resource rights
LNG and the likely Dutch Disease Effect: Development phase (now): Damaging HR losses to the boom sector. Many mechanics, engineers, welders, HGV drivers etc leaving; new recruits not available. HR costs are being driven up. TVET suspended apprenticeship courses. Palm oil industry currently has >300 apprentices. Being asked to establish own equivalent facilities. Production phase: MAJOR RISKS Lower PGK value of exports and greatly elevated production costs severe bottom line impacts. The existing crippling operating costs associated with the country s failing transport infrastructure will become critical. DD Mitigation? Priority must be unprecedented public investment (thru PPP?) in reconstruction & maintenance of ROADS ROADS ROADS, BRIDGES and PORTS and SOCIAL INFRASTRUCTURE starting NOW Also transport subsidies, fuel subsidies, enhance tax credit scheme
Palm Oil Papua New Guinea Thank You
Minimum Viable Development: 10,000ha plantation and 60t/hr CPO mill Investment Costs: PGK Agricultural Field development, planting, roads etc (@K9,950/ha) 99,500,000 Capex (buildings, vehicles & facilities @ K6,000/ha) 60,000,000 General development charges yrs 1-3 (@K600/ha/yr) 12,000,000 Milling & Oil Storage/Handling 60t/hr CPO mill 45,000,000 Mill tank farm (4x 1,500 tonne tanks)+(pump hse, piplines, boiler etc) 7,000,000 Port tank farm (as above) 7,000,000 Port/harbour modification (assumes deep water port already exists) 3,000,000 TOTAL INVESTMENT COST 233,500,000 Notes: Estimates based on 2009 actuals at a favorable location From first field activity (nursery) all above incurred within 4-years Would employ ~1,300 people (management & professional salaries not included above) If smallholder are part of this development, the planted area (& cost) needs to be increased - ref s/h yields ~50% of plnt) Emerging indications suggest CPO mill cost could to be higher (approach K50 million) Assumes adequate road & bridge infrastructure existsi in development area
CIMC Workshop Impact of LNG on the PNG Agriculture Sector 1 April 2011 Palm Oil Model: Agro-Nucleus Enterprise
Oil Palm
Oil Palm - grown by Smallholders Large Plantations
Palm Oil CPO PKO
Palm Oil made here x12 (and 2 more on the way)
x2 Downstream Refining
Development of Oil Palm in PNG: Vanimo Wewak Mt. Hagen Factors that affect growth : Rainfall 1800-5000 mm / year Sunshine Gusap 2005 Ramu oil palm project Lae 1987 New Ireland oil palm project Kavieng min of 2000 h / year Rabaul Temperature 1969 between Bialla oil 22 palm project 32 o C Kimbe Altitude less than 500 m above SL Popondetta 1967 Hoskins oil palm project 1976 Popondetta oil palm project Daru Port Moresby 1920 s observation plantings 1960 s WB study re recommendation Alotau 1985 Milne Bay oil palm project
Nucleus Estate/Smallholder model (NES)
Smallholder Plantation Smallholder Smallholder
Smallholder Crop collection, transport & processing provided by a Milling Company Plantation Mill Smallholder Smallholder
Crop is harvested every 10-14 14 days all year round Smallholder Plantation Mill Smallholder Within 3-days of cutting, crop must be transported to mill Smallholder
Palm oil is transported to the port bulking terminal for export Smallholder Bulk Terminal Plantation Mill Smallholder Smallholder
Smallholder Nucleus Estate (or Major Integrated Producer): Fully vertically integrated companies; Bulk R&D, seed production, Terminal plantations, transport, milling, refining, marketing and commodity trading. Via NES model they provide to smallholders: Seedlings Crop collection & transport FFB purchasing Financial credit (usually interest free) Plantation Pest & disease control operations Extension & support services (direct) Smallholder Voluntary financial Mill support for Government extension service Repair & maintenance of transport infrastructure Support for social infrastructure (education, health & police) Smallholder Future electricity from CDM methane power plants?
Oil palm production & area in PNG Area Estimates Dec 2009 (ha) Project Area Plantation Smallholder Total Hoskins (NBPOL, Mosa Group) 32,228 21,902 54,130 41.6% 82.3% Popondetta (NBPOL, Kula Group) 8,994 14,285 23,279 17.9% Milne Bay (NBPOL, Kula Group) 11,629 1,699 13,328 10.2% New Ireland (NBPOL, Kula Group) 5,689 2,613 8,302 6.4% Ramu (NBPOL, RAIL) 7,668 260 7,928 6.1% Bialla (Hargy Oil Palms) 9,906 13,163 23,069 17.7% TOTAL 76,114 53,922 130,035 58.5% 41.5% FFB Production in 2010 (tonnes) Project Area Plantation Smallholder Total Hoskins 965,911 425,358 1,291,349 51.4% 84.1% Popondetta 228,659 143,043 371,702 14.8% Milne Bay 235,998 12,426 248,424 9.9% New Ireland 105,485 16,638 122,123 4.9% Ramu 81,202 953 82,155 3.3% Bialla 205,871 192,669 398,540 15.9% TOTAL 1,723,206 791,087 2,514,293 68.5% 31.5%
Value of Major Agricultural Exported from PNG - 1976 to 2009 1,200,000 1,100,000 Palm Oil & Derivatives 1,000,000 Coffee Export Value (K'000, fob) 900,000 800,000 700,000 600,000 500,000 400,000 Cocoa Copra Palm Oil Coffee 300,000 200,000 100,000 0 1976 1980 1984 1988 1992 1996 2000 2004 2008 Year
Exported Oil Palm Products in 2009 PGK Tonnes Crude Palm Oil (CPO) 729,791,292 445,227 Palm Kernel (PK) 9,913,584 15,420 Palm Kernel Oil (PKO) 61,873,379 34,425 Palm Kernel Expeller (PKE) 1,951,280 13,654 Refined Bleached Deodorized Palm Oil (RBDPO) 48,273,700 21,321 Olein 23,041,254 14,223 Stearin 24,085,339 11,370 Palm Fatty Acid Distillated (PFAD) 3,722,056 3,366 Waste acid oil 39,907 70 TOTAL VALUE OF EXPORTS 902,691,791
Change in Quantity of Agricultural Commodities Exported from PNG 2007 to 2009 2,000 1,800 1,600 Coffee Cocoa Palm Oil & Derivatives % Chang ge relative to 1976 1,400 1,200 1,000 800 600 Copra Oil Palm 400 200 0-200 1976 1980 1984 1988 1992 1996 2000 2004 2008 Year
National Oil Palm Organisations P.O.P.A. Palm Oil Producers Association O.P.I.C. Oil Palm Industry Corporation O.P.R.A. Oil Palm Research Association
POPA - The Oil Palm Companies New Britain Palm Oil Group: - New Britain Palm Oil Ltd (WNBP) - Ramu Agri-Industries Ltd - Kula Palm Oil: Higaturu Oil Palms, Oro Milne Bay Estates, MBP Poliamba Ltd, NIP Hargy Oil Palm Pty Ltd
Oil Palm Industry Corporation
Oil Palm Industry Corporation Statutory Organisation established by the OPIC Act 1992 to replace DPI/DAL Smallholder Oil Palm Extension Service OPIC s sole responsibility is to provide extension & support services to smallholder oil palm growers Managed at a local level through LPCs Principally financed by FFB levy (smallholders and voluntary matching payment from milling C o s). No Government funding for extension services. All milling companies are also providing parallel extension services to smallholder growers
Oil palm smallholders in PNG: Number of smallholder blocks (Dec '09) Project Area # blocks Hoskins 7,126 Popondetta 5,707 Milne Bay 789 New Ireland 1,405 Ramu 130 Bialla 3,156 Total 18,313 ~200,000 dependent for their livelihoods on oil palm blocks
Types of Smallholders: Land Settlement Scheme (LSS); Alienated land, 99-yr State lease Older project areas only (WNBP & Oro) Settlers from other parts of PNG Serious land pressure issues (already 3rd generation) Village Oil Palm (VOP); Development of own customary land Lower productivity Customary Rights Purchase Blocks (CRPB); Recent trend esp in Hoskins area (ref CLUA)
PNG Oil Palm Research Association
PNG Oil Palm Research Association A not-for-profit research association formed in 1980 Owned by and operated for all oil palm growers Centres in all oil palm production areas Recognised by Government as being part of PNG s National Agricultural Research System (NARS) Financed by FFB levy from plantations & smallholders and external research grants. No Government funding for oil palm R&D.
Palm Oil Sub-sector Apex Body? No apex body currently exists in the palm oil sub-sector. Need for such an entity identified by all stakeholders. Also the need to avoid the governance, performance and accountability issues associated with public sector bodies is recognised. Palm Oil Council is currently in the process of being formed
The Road Ahead
WHAT ARE THE ISSUES THAT WILL AFFECT SUSTAINABLILITY OF OIL PALM DEVELOPMENT IN PNG? THE TOP SPECIFIC ISSUES RAISED BY STAKEHOLDERS... Shortage of skilled labour and experienced management staff Over-population in oil palm development areas Infrastructure development, support & maintenance Land issues accessibility & disputes Pests & disease increasing risk Lack of Government support & services Cash management, rural financial services & high cost of living Poor quality of political & public sector leadership Public opinion and anti-oil palm campaigns Law & order, alcohol & drugs, HIV and other social issues...
Road ahead - focus and commitment to sustainability: All palm oil companies achieved ISO14,001 accreditation PNG a leader in development of RSPO All palm oil companies RSPO certified (or in the process of being) Large investment in sustainability A profound systems change - not an add-on Increased cost of production (~8$ per tonne) large capital investment (refining, fractionation & CDM) A major driver is market access: All PNG s palm oil is destined for Europe Highly sensitive market to issue of sustainability and traceability Other Markets?: Despite being a world leader in business & technical innovation Production costs in PNG very high and timelines long PNG can t compete on price Indonesian, Malaysia & others
Industry Growth in next 10-1515 years? Very little alienated land available for development (not that this is a problem) Expansion via; Smallholders Lease leaseback sub-lease arrangement with customary land owners for plantation development RSPO Criteria 7.3 (primary forest & HCV) Carbon stock threshold to be adopted for land conversion Focus on yield intensification and planting on non-forest land Possibility of new viable and sustainable new projects in PNG? One per decade, max two!
Government and palm oil development? No support for the real palm oil sub-sector Over 15-years of Government facilitation of new palm oil developments which has led to?? DSP2030 & NADP triple palm oil exports by 2030? Expressed strong desire for new investors Appears PNG is being advertised overseas as a large available land bank Departments & politicians courting any entrepreneurial proposal no matter how little expertise, credentials or lack of financial capacity are exhibited BUT: No consultation with the country s palm oil sector No understanding of palm oil development and its requirements in PNG
MAJOR RISKS The virtual palm oil industry!! Emergence of many oil palm agro-forestry projects All with a focus on securing FCAs! Land grab using SABLs Over 5.3 million ha LLB to third parties (i.e. land alienation, usually for 99-yrs) Most profess to be for palm oil development!! This poses a massive reputational risk for the country and its palm oil exports; this will directly affect our market access; and Is blocking real development opportunities from real investors The real palm oil industry must take (and is taking) an active role is supporting awareness, opposition and mitigation activities to prevent these abuses of customary land & resource rights
LNG and the likely Dutch Disease Effect: Development phase (now): Damaging HR losses to the boom sector. Many mechanics, engineers, welders, HGV drivers etc leaving; new recruits not available. HR costs are being driven up. TVET suspended apprenticeship courses. Palm oil industry currently has >300 apprentices. Being asked to establish own equivalent facilities. Production phase: MAJOR RISKS Lower PGK value of exports and greatly elevated production costs severe bottom line impacts. The existing crippling operating costs associated with the country s failing transport infrastructure will become critical. DD Mitigation? Priority must be unprecedented public investment (thru PPP?) in reconstruction & maintenance of ROADS ROADS ROADS, BRIDGES and PORTS and SOCIAL INFRASTRUCTURE starting NOW Also transport subsidies, fuel subsidies, enhance tax credit scheme
Palm Oil Papua New Guinea Thank You
Minimum Viable Development: 10,000ha plantation and 60t/hr CPO mill Investment Costs: PGK Agricultural Field development, planting, roads etc (@K9,950/ha) 99,500,000 Capex (buildings, vehicles & facilities @ K6,000/ha) 60,000,000 General development charges yrs 1-3 (@K600/ha/yr) 12,000,000 Milling & Oil Storage/Handling 60t/hr CPO mill 45,000,000 Mill tank farm (4x 1,500 tonne tanks)+(pump hse, piplines, boiler etc) 7,000,000 Port tank farm (as above) 7,000,000 Port/harbour modification (assumes deep water port already exists) 3,000,000 TOTAL INVESTMENT COST 233,500,000 Notes: Estimates based on 2009 actuals at a favorable location From first field activity (nursery) all above incurred within 4-years Would employ ~1,300 people (management & professional salaries not included above) If smallholder are part of this development, the planted area (& cost) needs to be increased - ref s/h yields ~50% of plnt) Emerging indications suggest CPO mill cost could to be higher (approach K50 million) Assumes adequate road & bridge infrastructure existsi in development area
. Impact of LNG on the PNG Economy Particular reference to the Agriculture Sector Contribution by PNG Sustainable Development Program Ltd. March 31 st 2011
Governance Structure PNGSDP established by Agreement between BHP Billiton and the State in October 2001 as a not for Profit Company Governed by its Constitution and Company Rules Governance structure Board with 7 Directors (3 BHP, 3 PNG, 1 Singapore) Investment and Audit Committees of the Board. The Board meets quarterly and reports Publicly annually through ARMs. Next ARM in June 2011 2
PNGSDP Finances Owns 63.4% of OK Tedi Mining Ltd From Dividend Incomes. 2/3 invested in Long Term Fund (LTF) 1/3 used for development purposes in PNG (DF) Long Term Fund (LTF) Invested globally by Fund Managers To be drawn down after mine closure to support the Western Province for a minimum of 40 years. Development Fund (DF) 2/3 Rest of PNG 1/3 Western Province Balances of Funds at July 2010 LTF US$910m (K2.49bn) projected US$1.2bn (K3.2bn) by 2013. DF - US$129.5m (K359.8m)) 3
Guidelines for use of DF Projects supported must be sustainable in all respects. Implementation through partners. PNGSDP does not implement. Support rather than take over roles of Government and partners Where opportunities are available, support development through business model (eg, MF and Energy) Main emphasis on economic projects and supporting infrastructure. Seek funding contributions from others. Require contributions from beneficiaries (cash/kind) As mine closure approaches, increased focus to the WP Program. 4
Development Program Funding Mechanisms DF can be given as grants or loans or a combination. DF supports large Projects > K250,000 and Community Projects <K250,000 per project. Projects must demonstrate wider community benefits. Will not fund political, church activities or projects benefitting individuals or narrow interest groups. Investments are funded by DF initially to be refunded by the LTF as commercially viability are achieved. All Project funding are approved by the Board and implemented through Project Funding Agreements and progress reported to the Board quarterly. Overall performance reported publicly at ARMs 5
National Program Approach Rely on receiving good project proposals from others. Objective To support to growth of economic activities and associated infrastructure as the means to improve community livelihoods. Projects Counterpart contribution of Roads rehabilitation in 6 Provinces K48.2million Micro Finance Services (Branches in POM, Oro, WNB, MB) K19.5 million in equity investment and provides ongoing operational subsidy. Strong emphasis on provide financing facility for communities with no access to the formal banking system. SADP support for Oil Palm smallholder in-planting scheme in Oro and WNB K34.7 million, K9.8 million spent on rehabilitation of feeder roads to oil palm blocks Community Support Program covering other Provinces K21.5million including support for community agriculture projects. Discussion with commodity industries on focused programs of assistance. 6 Ongoing discussion with CIMC agriculture sub committee on support for an Agriculture Innovation scheme.
Western Province Program Approach More proactive and take holistic approach in undertaking development programs Key Development Issue Mine will close and the impact on the Province will be massive Objective - to support projects that will mitigate impact of mine closure on communities Strategies Develop a number of transformational projects to support WP economy in the long term At the same time support projects to improve livelihoods of communities and prepare them for life after the mine. 7
Western Province Program Transformational Projects Daru Deep Water Port Transhipment centre for mining activities and other developments in the region. Export of Agricultural and Forestry Products from the Western Province Investigating opportunities for commercialisation of gas and industrial development linked to Daru Deep Water Port and hydropower sources. 8
Western Province Community Projects Rubber Development to expand the industry to 10,000 ha by 2018 K15.5million rising to K30million in partnership with FRPG, OTML and NFRL. Infrastructure support a number of roads, jetties and airstrip to improve accessibility for communities to markets and services K87.6million. Aquaculture support the development and management of barramundi industry and other fisheries into the future Barramundi Hatchery K27.4million. Telecommunication telecommunications towers to provide 90% communication coverage in the Province K77.8million. To be completed by early May 2011 Community based projects through faith based organisations supporting delivery of community services through the Churches K13.6 million. Going forward, develop a number growth centres to be led WP Rubber industry. 9
Experiences Having a strong Board (independent of Govt) with extensive industry experience has been fundamental to PNGSDP operation. PNGSDP represents an important development resource for PNG and the WP which can be used to greater effect if there were genuine and closer collaboration with the Government. Delivery of projects are severely affected by implementation capacities building capacities of project partners including create delivery structures are important contributions. The use of commercial delivery model in Rubber industry in the WP is producing promising results with good prospects for sustainability. Improvement to agriculture overall requires more than just investment various cash crops, delivery systems, etc, it requires changes in attitudes of farmers towards agricultural activities as merely as subsistence activities but as commercial opportunities. PNGSDP has built or contributed funding to road infrastructure in PNG and the WP which are government owned assets. Without maintenance, these investment are lost. Seeking agreement with National and FRPG on a dedicated maintenance structure for the WP, eg, water and airports. 10
11 Thank you all